Trade restrictions will stop foreign imports, which will increase American employment and protect American jobs. Most economists realize this argument is wrong. Can you explain why?
Trade restrictions will stop foreign imports, but this means that foreigners will no longer have the dollars that those imports used to generate. With fewer dollars, foreigners will buy fewer American goods (since this is virtually the only thing that dollars are good for). We expand production in areas in which we have a comparative disadvantage. At that same time, production and employment in the exports for which we do have a comparative advantage will suffer. Trade restrictions only protect jobs in industries that compete with imports; they destroy jobs in export industries.
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In the above figure, the economy is at point A when changes occur. If the new equilibrium has a price level of 100 and real GDP of $17.0 trillion, then it must be the case that
A) aggregate demand has decreased. B) aggregate supply has decreased. C) aggregate demand has increased. D) aggregate supply has increased.
Refer to Table 9-11. With trade, what is the total gain in clock production?
A) 150 B) 300 C) 2,100 D) 2,250
The short-run supply curve for a perfectly competitive firm is that portion of the MC curve above the AVC curve
a. True b. False Indicate whether the statement is true or false
As long as a firm can freely dispose of any extra inputs it may have:
A. its production function must slope downward. B. its production function must be concave. C. its production function must slope upward. D. its production function must be convex.